The Relationship of Hospital CEO Characteristics

......................................................................................
The Relationship of Hospital CEO Characteristics

to Patient Experience Scores
Christina Galstian, DSc, CEO, State of California Correctional Health Care Services, Los Angeles;
Larry Hearld, PhD, associate professor, Department of Health Services Administration, School of Health
Professions, University of Alabama at Birmingham; Stephen J. O’Connor, PhD, FACHE, professor,
Department of Health Services Administration, School of Health Professions, University of Alabama
at Birmingham; and Nancy Borkowski, DBA, CPA, FACHE, FHFMA, professor, Department of
Health Services Administration, School of Health Professions, University of Alabama at Birmingham
EXECUTIVE SUMMARY
Efforts by hospitals to improve patient experience continue as changes in policy such as the
Affordable Care Act of 2010 have made patient experience a cornerstone of promoting
greater value in the United States. Hospital CEOs play an important role in promoting
positive patient experiences as they set the organizational vision and strategic goals and can
execute change to support positive experiences.
This study assessed whether three CEO characteristics—education, tenure with the orga-
nization, and gender—were associated with patient experience scores of California hospitals
in 2013 and 2014. Using a pooled, cross-sectional design with ordinary least squares re-
gression to account for other hospital and market characteristics, the analysis indicated that
hospitals with female CEOs and longer-tenured CEOs were associated with more positive
patient experience scores. Higher levels of education were not significantly associated with
patient experience scores. Overall, the model covariates accounted for approximately 14.0%
of the variance in patient experience scores between hospitals, with CEO characteristics
accounting for approximately 2.4% of this variation. Such findings highlight the important
yet emerging role of CEO characteristics when accounting for patient experience.
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For more information about the concepts in this article, contact Dr. O’Connor at sjo@uab.edu.
The authors declare no conflicts of interest.
© 2018 Foundation of the American College of Healthcare Executives
DOI: 10.1097/JHM-D-16-00020
50 Volume 63, Number 1 January/February 2018

Hospital CEO Characteristics and Patient Experience Scores
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INTRODUCTION (Besley, Montalvo, & Reynal-Querol, 2011;
Efforts by hospitals to improve patient ex- Hambrick & Mason, 1984). Likewise, re-
perience continue as changes in policy such search has found that executives with higher
as the Affordable Care Act of 2010 have made levels of education are more successful at
patient experience a cornerstone of pro- managing change, facilitating organizational
moting greater value in the U.S. healthcare adaptation, and motivating followers to im-
system. For example, as part of the Centers prove their own leadership skills (Baker,
for Medicare & Medicaid Services’ (CMS) Mathis, & Stites-Doe, 2011; Wiersema &
hospital value-based purchasing program Bantel, 1992).
(HVBP), in 2016, patient experience con- Higher levels of education may influ-
stituted 25% of a hospital’s performance ence organizational performance, in gen-
score used to calculate hospital incentives eral, and patient experience, specifically, by
and penalties. It is estimated that approxi- equipping organizational leaders with the
mately $1.5 billion will be available for technical, human, business, and conceptual
distribution based on four domains of skills (Brooks, 1994; Reilly, 2004) necessary
performance, of which patient experience for success. For example, formal graduate
is one (CMS, 2016). education may familiarize leaders with the
Hospital CEOs play an important role theories and practices of successful leader-
in promoting positive patient experiences as ship, which can help them to identify the
they are responsible for setting the organi- drivers and barriers of change and imple-
zational vision and strategic goals and pos- ment the most effective approaches to im-
sess the ability to execute timely and effective proving the patient experience. Likewise,
change that may support such positive ex- one could argue that leaders with higher
periences. Given the CEO’s potential influ- levels of education may be more likely to
ence on the organization’s performance and engage in effective, evidence-based decision
the growing emphasis on patient experience making, thereby reducing mistakes and false
as an indicator of hospital performance, an starts when pursuing programs to improve
important question is whether patient ex- patient experience. As noted by many ob-
perience varies as a function of CEO char- servers in healthcare, the importance of mas-
acteristics. In this study, these characteristics ter’s, doctoral, and other advanced graduate
are defined as education, gender, and ten- degrees has been highlighted for promoting
ure (Barker & Mueller, 2002; Datta & better workplace environments that are asso-
Rajagopalan, 1998). The study addresses this ciated with better quality performance out-
question by empirically examining whether comes (Aiken, Clarke, Cheung, Sloane, &
these characteristics were associated with Silber, 2003; Blegen, Vaughn, & Goode,
patient experience. 2001). For example, Rappleye (2015) re-
ported that 98% of the top 50 U.S. health
CHARACTERISTICS OF HOSPITAL CEOS systems identified by Becker’s Hospital Re-
CEO Education view were led by CEOs holding advanced
Research has found that leaders with more degrees (master’s, 56%; doctorate, 42%).
advanced educational degrees are associated Likewise, Garman, Goebel, Gentry, Butler,
with better organizational performance and Fine (2010) reported that 78% of the
www.ache.org/journals 51
Journal of Healthcare Management
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nationally ranked hospitals identified in effectively with their senior leadership teams,
2007 by U.S. News & World Report were led focus on building trust, and more willingly
by CEOs with master’s (60%) or doctoral pursue innovative strategies (Finkelstein,
degrees (18%). Hambrick, & Cannella, 2008). Likewise,
In this study, we consider terminal shorter CEO tenure is associated with greater
degree status. Terminal degrees are the risk taking and readiness for change, whereas
highest academic degrees recognized in a longer-tenured CEOs tend to be more cau-
given field and include research and pro- tious and conservative when making change-
fessional doctoral degrees such as doctor related decisions (Finkelstein et al., 2008; Hitt
of medicine (MD), doctor of philosophy & Tyler, 1991). Longer-tenured CEOs tend
(PhD), doctor of science (DSc), doctor of to narrow their information search and rely
science in nursing (DSN), doctor of public on applying previous experiences to new
health (DrPH), and others. Research has circumstances rather than accruing new
found that leaders with graduate-level de- knowledge (Hambrick & Finkelstein, 1996;
grees are more likely to exhibit transfor- Finkelstein & Hambrick, 1990; Finkelstein
mational leadership behaviors such as role et al., 2008; Hambrick & Fukutomi, 1991).
modeling a desired goal-achieving behavior In fact, Alexander and Lee (1996) found
(Pastor & Mayo, 2008). Likewise, leaders that the failure rate of small rural hospitals
with graduate degrees that are grounded in dropped with CEO tenure but grew ulti-
theory, research, and utilization of empirical mately after the sixth year of tenure. Thus,
literature are, like leaders with terminal de- although CEO tenure has been studied in
grees, more likely to use evidence-based terms of various outcomes in both health-
practices (Aarons, 2006). The use of such care and nonhealthcare settings, there have
evidence can help leaders improve their been no studies to date that examine how
decision making for selecting effective strat- hospital CEO tenure relates to patient
egies in response to changing external envi- experience.
ronments, such as an increasing emphasis
on patient experience. Hypothesis 2 (H2): Relative to hospi-
tals led by CEOs with longer tenure,
Hypothesis 1 (H1): Relative to hospitals hospitals led by CEOs with shorter
led by CEOs without terminal degrees, tenure will be associated with higher
hospitals led by CEOs who hold termi- patient experience scores.
nal degrees will be associated with
higher patient experience scores. CEO Gender
Women have been underrepresented in the
CEO Tenure highest levels of healthcare leadership (Lantz,
The literature suggests that longer CEO 2008). Many are not reaching CEO posi-
tenure is negatively associated with organi- tions because of barriers such as lack of
zational performance (Henderson, Miller, & mentoring and leadership development op-
Hambrick, 2006; Levinthal & March, 1993; portunities for career progression (Hauser,
Miller, 1991). In contrast, shorter-tenured 2014; Lantz, 2008; Sexton, Lemak, & Wainio,
CEOs have been found to collaborate more 2014). Consequently, the literature regarding

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gender attributes related to performance is CEO data (aggregated in an Excel spread-
sparse. Moreover, no research to date has sheet, by hospital) and the American Hos-
examined the effects of CEO gender on pa- pital Association annual survey data using
tient experience. the hospital name. Market characteristics
In industries other than healthcare, from the Area Health Resource File were
women have been described as transforma- then merged with these data using the
tional leaders (Eagly, Johannesen-Schmidt, county name.
& van Engen, 2003). For example, some have
suggested that female leaders approach Variables
leadership differently than male CEOs, Dependent Variable
placing a greater emphasis on behaviors The dependent variable, patient experi-
and skills such as tactfulness in challenging ence, was based on the eight “patient ex-
circumstances, willingness to acknowledge perience of care” items included in the
mistakes, engagement in trust building, HBVP total performance score (e.g., com-
problem solving, collaboration, transpar- munication with nurses, communication
ency, and compassion (Appelbaum, Audet, with physicians, pain management, overall
& Miller, 2003; Paton & Dempster, 2002; rating of hospital; CMS, 2012). To derive
Paustian-Underdahl, Walker, & Woehr, an aggregate patient experience score, CMS
2014). We posit that a greater emphasis on first calculates an achievement score (i.e.,
these behaviors may help cultivate more pa- whether a hospital outperforms bench-
tient-centered cultures that support a posi- mark performance based on other hospi-
tive patient experience. tals’ performance) and an improvement
score (i.e., whether a hospital improves
Hypothesis 3 (H3): Relative to hospi- relative to its own historical performance).
tals led by male CEOs, hospitals led by Hospitals are assigned points (0–10) for
female CEOs will be associated with each item for both dimensions of perfor-
higher patient experience scores. mance. For each item, hospitals are then
assigned the higher of these two scores.
METHODS For the patient experience domain, CMS
Data Sources also includes up to 20 points based on
The study sample consisted of 249 California consistency (i.e., scoring above the 50th
hospitals for calendar years 2013 and 2014. percentile on all eight items). These points
Data for the analysis were drawn from sev- are then totaled, with the final result being a
eral sources: (a) the 2013 and 2014 American continuous variable ranging from 0 to 100.
Hospital Association annual surveys, (b) In the final step, we calculated the weighted
the California Hospital Association (CHA) patient experience score by multiplying the
2013 and 2014 membership directories of aggregate score by the percentage of the total
hospital CEOs, (c) individual hospital web- performance score based on patient experi-
sites, (d) LinkedIn, (e) the Medicare Hospital ence (30% in 2013 and 2014). We opted for
Compare website, and (f) the Area Health this weighted score because we were inter-
Resource File. The Hospital Compare pa- ested in using the patient experience score
tient experience data were merged with the most closely related to overall HBVP
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performance. Thus, the final dependent beds), and system affiliation (1 = member of
variable could range from 0 to 30. multihospital system, 0 = independent hos-
pital). Hospital market (county) charac-
Independent Variables teristic variables included competition
CEO characteristics were derived from (Herfindahl-Hirschman Index of hospital
primary and secondary data sources, with bed market share) and sociodemographic
secondary sources to verify the accuracy of characteristics including race (percent
the primary source. The primary source for White and minority), poverty level (per-
identifying CEO characteristics was the centage below poverty line), and age (per-
CHA membership directories. The CHA centage ≥ 65 years). A year dummy variable
provides a profile for each California hos- was also included to account for changes
pital, including demographic characteris- over time (2014 = 1, 2013 = 0). A description
tics about its leadership team. Based on this of the study variables and their respective
profile, three CEO characteristic variables data sources is provided in Table 1.
were constructed for the analysis. Gender
was a dichotomous variable (female CEO = Statistical Analysis
1, male CEO = 0). Tenure was a continuous Univariate statistics were used to describe
variable calculated as the number of years the study sample. Ordinary least squares
in the current CEO position. Education TABLE 1
was a dichotomous variable (CEO with a Hospital and CEO Characteristics
terminal degree = 1, CEO without a ter-
minal degree = 0). 2013 2014
The secondary data sources were used Variables n % n %
to verify the information provided by the Independent variables
CHA profiles or to provide primary infor- Education
mation when the information was missing Terminal (1) 93 31.6 77 28.1
from the primary source data. Specifically, Nonterminal (0) 201 68.4 197 71.9
we first visited the hospital websites to verify Gender
Female (1) 88 29.9 76 27.7
the information provided by the CHA di-
Male (0) 206 70.1 198 72.3
rectory. Where the CHA directory and the
Control variables
hospital website provided inconsistent infor-
Hospital ownership
mation, LinkedIn was used as a tertiary For-profit (1) 70 23.8 66 24.1
source to adjudicate the discrepancies. Nonprofit (0) 224 76.2 208 75.9
Hospital location
Control Variables Rural (0) 11 3.7 9 3.3
The study controlled for several hospital- Urban (1) 283 96.3 265 96.7
and market-level factors that could poten- Teaching status
tially affect patient experience. Hospital Teaching (1) 85 28.9 82 29.9
variables examined included location Nonteaching (0) 209 71.1 192 70.1
(urban = 1, rural = 0), ownership (for-profit = System affiliation
1, nonprofit = 0), teaching affiliation (teach- System (1) 201 70.0 201 70.0
Independent (0) 86 30.0 86 30.0
ing = 1, nonteaching = 0), size (number of

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regression models were used to analyze in the United States revealed no significant
relationships between CEO characteristics differences with respect to ownership, sys-
and patient experience while controlling tem affiliation, and teaching status, although
for organizational and market characteris- sample hospitals were larger, on average,
tics. The analysis used a hierarchical, block than hospitals in other states. Sample hos-
modeling strategy, where an initial model pitals were operating in markets with higher
with only control variables was assessed, percentages of Hispanic and Asian residents
followed by a second model that included and lower percentages of White and Black
the control variables and CEO predictor residents than nonsample hospitals. Like-
variables of interest. This strategy enabled wise, sample hospitals were operating in
a comparison of the amount of additional markets with lower percentages of residents
variance explained by the CEO characteristics, over the age of 65 years compared with
above and beyond the control variables. nonsample hospitals. Thus, generalizations
The contribution of CEO characteristics of the study’s findings should be made
was assessed by calculating change in the with caution and with these differences
coefficient of determination (R2) between in mind.
the two models. On average, sample hospitals reported
a patient experience score of 10.2 in 2013,
RESULTS which declined to 8.7 in 2014 (see Table 2).
The study included 294 acute care hospitals The average CEO tenure was 6.4 years in
in California (Table 1). A comparison of 2013 and 6.9 years in 2014. Male CEOs
organizational characteristics between these (70.1% in 2013 and 72.3% in 2014) were
hospitals and the other acute care hospitals more prevalent in the sample than female
TABLE 2
Descriptive Statistics for Continuous Variables
2013 2014
Variable n Mean Standard Deviation n Mean Standard Deviation
Dependent variables
Patient experience 287 10.2 5.2 266 8.7 4.8
Independent variables
CEO tenure (years) 294 6.37 5.80 274 6.9 5.4
Control variables
Number of beds 294 249 172 274 245 161
Market competition 294 0.12 0.24 274 0.10 0.19
Ethnicity
Black 294 6.4% 3.4% 274 6.6% 3.5%
Hispanic 294 38% 13.4% 274 38.0% 13.4%
Asian 294 13.4% 8.2% 274 13.5% 8.2%
White 294 40.2% 14.1% 274 40% 14%
Below poverty 294 16.0% 4.1% 274 16% 4%
Age 65+ years 293 12.7% 2.1% 274 12.7% 2.1%
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CEOs (29.9% in 2013 and 27.7% in 2014). 2003; Kark, Waismel-Manor, & Shamir,
In 2013, nearly one third (31.6%) of all sam- 2012; Paton & Dempster, 2002; Paustian-
ple CEOs had earned a terminal degree, Underdahl et al., 2014). To the extent that
which declined to 28.1% in 2014. Most hos- such environments are aligned with or can
pitals were nonprofit (76%). Urban hospitals be used to promote and support a more
accounted for 96% of the sample. Teaching patient-centered environment, it is possible
hospitals constituted 29% of the study sam- that CEO gender may provide one explana-
ple (see Table 1). tion for why hospitals differ with respect to
The CEO educational level was not sig- patient experience. Additional research
nificantly associated with patient experience; would be needed to assess these (and other)
thus, the analysis did not support H1. Ten- mediating mechanisms.
ure was positively associated with patient CEO education was not significantly
experience scores (b = 0.089, p < .05), which associated with patient experience. One
did not support H2. Finally, hospitals with a explanation for this finding is simply that
female CEO reported higher average patient the educational skills and knowledge em-
experience scores (b = 2.89, p < .001), pro- phasized in terminal-degree programs are
viding support for H3 (see Table 3). not important correlates of patient experi-
Hospital size was the only control var- ence. Another potential explanation per-
iable significantly associated with patient tains to the types of outcomes considered
experience (b = −0.007, p < .001). in the study. Patient experience is difficult
Overall, the model covariates accounted to measure because it is “a complex, am-
for approximately 14.0% of the variance in biguous concept that lacks a common or
patient experience scores between hospitals. ubiquitous definition . . . with multiple
CEO characteristics, above and beyond the cross-cutting terms (e.g., satisfaction, en-
control variables, accounted for approxi- gagement, perceptions, and preferences)”
mately 2.4% of the variation in patient (LaVela & Gallan, 2014, p. 28). It is possible
experience scores. that education (specifically terminal degree)
has a greater impact on objective measures
DISCUSSION such as clinical processes and outcomes of
The most robust finding of this study was care and a smaller impact on subjective
related to gender. Specifically, hospitals led measures such as patient experience, but this
by female CEOs were associated with sig- is a conjecture in need of future research.
nificantly higher patient experience scores. The study found shorter CEO tenure to
One potential explanation for this finding be associated with lower patient experience
is grounded in previous research on CEO scores. One potential explanation for this
gender that points toward the different finding is once again embedded in the dif-
work environments cultivated by male and ferent work environments that may be
female CEOs. This research suggests that cultivated by different types of CEOs. Patient-
female executives may be more collabora- centered cultures are critical for supporting
tive, transparent, and compassionate better patient experiences (Bramley, 2014;
leaders capable of inspiring more engaging Chen, Koren, Munroe, & Yao, 2014) and re-
work environments (Appelbaum et al., quire CEOs who understand their immediate

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TABLE 3
Ordinary Least Squares Regression Models for CEO Characteristics and Patient
Experience
Model 1 Model 2
Control Only CEO Characteristics and Controls
Variable b (Standard Error) b (Standard Error)
Intercept 2.19 (18.01) 0.20 (17.60)
CEO characteristics
Education – 3.08 (5.69) (0.45)
Tenure – .089 (0.043)*
Gender – 2.89 (0.54)***
Hospital controls
Independent Referent Referent
System affiliation −0.17 (0.56) −0.22 (0.55)
Nonteaching Referent Referent
Teaching 1.08 (0.59) 1.10 (0.58)
Nonprofit Referent Referent
For-profit − 1.37 (0.62)** −0.88 (0.61)
Number of beds −0.01 (0.002) *** −0.007 (0.002)***
Market controls
% Black −21.38 (20.34) −24.51 (19.90)
% White 16.25 (19.44) 16.36 (18.98)
% Hispanic 6.07 (17.40) 6.88 (17.01)
% Asian 10.96 (19.10) 10.01 (18.65)
% 65+ −21.42 (23.10) −21.69 (22.60)
% Below poverty 12.96 (9.11) 13.62 (8.90)
Market competition −1.83 (1.30) −1.94 (1.26)
Rural Referent Referent
Urban 2.24 (1.84) 2.44 (1.81)
Time
2013 Referent Referent
2014 −0.60 (0.49) −0.58 (0.48)
Adjusted R2 .116 .140
Change in R2 .024
*p ≤ .05. **p ≤ .01. ***p ≤ .001.
environments and stakeholder needs Larger hospitals, on average, reported

(Latham, 2013). CEOs who have longer ten- lower patient experience scores. This find-
ure with their organizations may have better ing is consistent with other research where
awareness and understanding of their envi- smaller hospitals report higher patient ex-
ronments and stakeholders and therefore perience scores and other performance
may be more effective at promoting cultures measures (Lehrman et al., 2010; Pink,
that support better patient experience. Murray, & McKillop, 2003; Rangachari,
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2007; Sjetne, Veenstra, & Stavem, 2007; 2013). Thus, the findings from this study
Young, Meterko, & Desai, 2000). are timely and important for providing in-
sight into ways to potentially improve
Limitations patient experience.
The study has several limitations that should The study’s statistical analysis indi-
be considered when interpreting the find- cated that CEO characteristics—gender
ings. First, this was a pooled, cross-sectional (female) and tenure (longer)—were posi-
study that used two years of data to examine tively associated with patient experience
the relationships between CEO characteris- scores. Both of these issues have consis-
tics and patient experience scores. Thus, the tently been addressed by the American
study cannot rule out the possibility that College of Healthcare Executives (ACHE)
better-performing hospitals attract a certain over the past two decades. Every five years,
type of CEO (i.e., reverse causality). Second, ACHE conducts a study to compare career
the value-based purchasing data were col- attainment of male and female healthcare
lected from secondary data sources. Despite executives. As reflected in the 2012 study’s
CMS and the Agency for Healthcare Re- results, women achieve CEO positions at
search and Quality rules and guidelines for about 50% of the rate at which men achieve
data quality, integrity, and reporting, these them. This represents a 10% improvement
data could have issues with accuracy and as compared with earlier studies. The low
completeness. Third, because this study was number of female hospital CEOs may be
limited to California hospitals, there are related to this group’s lower levels of career
limits to its generalizability. Fourth, the CEO aspirations to CEO positions (37%) versus
characteristics considered in the study were male (66%; ACHE, 2012), which may be at-
collected from various sources, and infor- tributable to past experiences of gender bias
mation published in those sources could be or perceptions of other glass ceiling barriers
inaccurate. Finally, the study focused on only (McKinsey & Company, 2015). Regarding
three CEO characteristics (education, ten- tenure, ACHE has been tracking hospital
ure, and gender). It did not assess CEO at- CEO turnover annually since 1981. In 2014,
tributes, such as leadership styles or financial the healthcare industry reported an 18%
incentives (higher pay), which may also be turnover rate in this senior executive posi-
important predictors of patient experience. tion (ACHE, 2015), with the average tenure of
3.5 years (Black Book Rankings, 2013).
CONCLUSION Many view this situation as a result of
Patient experience scores have become continuous changing dynamics with the in-
important indicators of organizational dustry due to consolidations, reimbursement/
performance and can differentiate hospi- payment model reforms, and other
tals in the marketplace. Consequently, CEOs strategic initiatives.
and other hospital leaders increasingly view Hospitals are being forced to reconsider
patient experience and strategies for its their care delivery systems to provide higher
improvement as important determinants value and improve the patient experience.
for future organizational success (Manary This study suggests that different character-
Staelin, Kosel, Schulman, & Glickman, istics of a CEO—gender and tenure with

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the organization—may be associated with Black Book Rankings. (2013). Headhunters charged
improved patient experience. Such findings to replace hospital CEOs with innovative industry
may be important information for hospi- outsiders. Black Book Board Survey. Retrieved
from www.blackbookrankings.com
tal boards and CEOs to consider when
Blegen, M. A., Vaughn, T. E., & Goode, C. J. (2001).
recruiting new leadership and developing a Nurse experience and education: Effect on qual-
leadership succession plan. The findings of ity of care. Journal of Nursing Administration,
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Brooks, K. A. (1994). The hospital CEO: Meeting the
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PRACTITIONER APPLICATION:
The Relationship of Hospital CEO Characteristics to
Patient Experience Scores
Rebecca Schulkowski, PharmD, FACHE, director, surgical services, St. Anthony’s Hospital,
St. Petersburg, Florida
P
atient experience has emerged as a focal point for hospitals in response to reimburse-
ment policies that use patient surveys as an indicator of high-value care. The financial
incentive for high patient experience scores via the Centers for Medicare & Medicaid’s
hospital value-based purchasing program drives hospital CEOs and boards to continuously in-
novate and provide quality care.
Galstian, Hearld, O’Connor, and Borkowski chose an intriguing topic to investigate:
the association of CEO characteristics with patient experience scores. The two variables
appear to be fundamentally related, as patient experience is a result of the culture of a
facility and the CEO is ultimately responsible for the organization’s vision, strategy, and
culture. The investigators found that female gender and a longer tenure were associated
with higher patient experience scores, whereas a higher level of education was not signif-
icantly associated with patient experience scores. The authors posited that female CEOs
may be more collaborative and transparent, which sets a more supportive environment for
patient-centered care. Those CEOs with longer tenure have a better understanding of
their environments and can therefore grow a culture that promotes higher patient
experience scores.
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The author declares no conflicts of interest.
DOI: 10.1097/JHM-D-17-00189

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